Federal 'bath salts' sting in Arizona nabs 5

by Dennis Wagner - Jul. 27, 2012 11:18 PMThe Republic | azcentral.com

A sting involving federal agents posing as members of the Hells Angels has led to the arrest this week of five men associated with an Arizona network that authorities say is responsible for producing tens of millions of dollars worth of a hallucinogenic drug marketed innocuously as "bath salts."

Doug Coleman, special agent in charge of the DEA in Arizona, said 17 search warrants were served here and about $3 million in assets were seized as part of a nationwide crackdown against a burgeoning synthetic designer-drug industry that has attempted to stay ahead of authorities by modifying the chemical makeup of its potent drugs. More arrests are expected in the operation.

According to an affidavit by federal agent Ken Henry, on May 20 three federal agents met with 25-year-old Joshua Lowenstein in a north Phoenix hotel suite to talk about "Eight Ballz." In conversations that were secretly videotaped and recorded, the phony bikers said they needed 20 kilos (44 pounds) for an upcoming motorcycle rally on the East Coast.

A month later, on June 20, the affidavit says federal task-force operatives consummated the deal in a parking lot on Thunderbird Road. Lowenstein allegedly arrived in a Honda and removed a black bag from his trunk containing 2,500 powder packets, which he exchanged for $5,600 cash.

A concealed bug captured the suspect as he was asked whether the packets labeled "Eight Ballz Ultra-Premium Glass Cleaner" were safe. He allegedly answered, "Well, I can't guarantee anything, given the nature of the product ... Be careful with that stuff."

The transaction represents just one scenario in the nationwide crackdown, Operation Log Jam.

During raids in 109 cities, the Drug Enforcement Administration said, 91 people were arrested and agents seized the equivalent of 18 million drug packets.

Lowenstein was one of five Valley men charged federally with attempting to distribute the hallucinogen PVP for human consumption. Other defendants were identified as: Nicholas Zizzo, 25, of Phoenix; Clinton Strunk, 42, of Mesa; Michael Lane, 51, of Cave Creek; and Andrew Freeman, 25, of Tempe.

Coleman said the $3 million seized reflected only a fraction of the Arizona network's earnings. "You're talking tens of millions of dollars, easily," he said.

None of the defendants or their attorneys could be reached.

If convicted, the suspects face up to 20 years in prison with maximum fines of $1 million.

But, as noted in the DEA affidavit, statutes governing designer drugs can be fuzzy because each time Congress bans a particular product, vendors come up with a slightly different formula. Prosecution problems are exacerbated because manufacturers mark the powders as "not for human consumption" and identify them as glass cleaners, incense or other household products.

Coleman said the marketing methods are a ruse: "These guys are fully aware of what they're selling ... and what it's being used for."

The government's 47-page complaint in U.S. District Court includes recorded conversations with defendants telling undercover agents that the powders they sell are lawful, but still could bring the wrath of federal narcotics agents.

Zizzo, owner of Phoenix-based Consortium Distribution LLC, was recorded fretting about the welfare of his 18 employees, according to the complaint: "... DEA could come in, they could arrest every single one of us," he said. "They can drag us out, put us in a cell and hold us there. God knows we aren't doing anything illegal."

Zizzo purportedly designed and named Eight Ballz and another bath salt known as Kratom, which he likened to artificial heroin. An online listing by the U.S. Patent and Trademark Office shows Zizzo sought a trademark for the Eight Ballz brand.

When ingested, snorted or smoked, bath salts and some other synthetic drugs have been linked to suicides, medical problems and anti-social behavior.

The Arizona criminal complaint says Freeman appeared on a May episode of Dateline NBC and touted a drug he designed known as "Bliss." On the show, Freeman described himself as "a mad (expletive) scientist." Asked about earnings, he said, "We're over a quarter-million dollars" during the first four months of 2011.

Although the designer-drug market has not historically been associated with violence, Coleman said elaborate sting operations require planning and moxie.

"Anytime you, as a law-enforcement officer, are portraying yourself as a drug dealer or buyer ... you're going into an uncontrolled situation and, if anything happens, you have to handle it," he said.

The DEA's Phoenix spokeswoman, Ramona Sanchez, said Operation Log Jam sends a message to those involved with an illicit industry: "The question is not whether we're going to come after you, it's when."